BHP Billiton profit advances 28% on price strength

World's top miner seems more growth ahead despite market swings

By

ChrisOliver

HONG KONG (MarketWatch) -- Anglo-Australian mining group BHP Billiton Ltd. said Wednesday income advanced 28% in the last year because of strong commodity prices, and also said it didn't expect much fallout from turbulence in the financial markets.

BHP Billiton, (BHP)
BHP, -0.17%
(BLT) the world's top miner, said net profit rose to $13.42 billion from $10.45 billion a year earlier, bolstered by high commodity prices and strong demand.

The miner said rising costs and fluctuations in exchange rates trimmed $1.5 million from earnings. This was offset by higher commodity prices, which helped lift earnings for the year by $7.1 billion. Increased volumes and new operations added $586 million to the bottom line.

BHP said it produced record amounts of natural gas, alumina, aluminum, copper, nickel, iron ore, manganese ore and metallurgical coal for the year.

Marius Kloppers, who replaces outgoing Chief Executive Chip Goodyear in Oct. 1, said in a teleconference Wednesday under his tenure at the company will continue to focus on acquisitions that are long-life and low cost.

Still confident

BHP said in a statement that, despite moderating U.S. economic growth, the outlook for the global economy remains positive, supported by solid economic activity in Asia and Europe.

The miner added it expects Chinese gross domestic product growth at 10% in 2008 "with risks remaining to the upside."

The firm said that recent discussions with customers have indicated they don't expect the volatility in the U.S and European credit markets to have a material impact on raw-material demand.

BHP declared a final dividend of 27 U.S. cents, taking the full-year dividend payout to 47 cents a share, up from 36 cents a year earlier.

The statement added that the U.S. economy remains on a softening trend with the housing sector acting as a drag on activity. It noted that U.S. consumer spending will slow through 2008, though growth should remain in positive territory, helped by low unemployment, low interest rate and strong momentum in the global economy.

The statement also noted that Japan faces increased risks of sliding back into deflation later in the year owing to weakness in the household sector.

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